KUALA LUMPUR, June 8 — Private health care providers in Southeast Asia are well-positioned to gain from rising incomes, increased health care spending, and a chronic underfunding of public health care systems in the region, said Fitch Solutions.
Fitch Solutions Country Risk and Industry Research said the outlook for investments in the private health care provider landscape in Southeast Asia continues to be positive due to strong growth fundamentals, albeit with challenges.
It said in a report yesterday that patients are increasingly utilising private health care services, in line with higher incomes seen across Asia Pacific economies, claiming that the quality of public health care in the region remains relatively low.
“We expect this trend to continue over our ten-year forecast period with a number of major markets across the region demonstrating rapid growth in expenditure on private healthcare,” Fitch Solutions stated in a report issued yesterday.
According to data by the World Health Organization (WHO), private health care spending — based on a 10-year compounding annual growth rate — will grow at the highest rate in the Philippines at 8.9 per cent, followed by Singapore (7.99 per cent), Indonesia (7.62 per cent), Thailand (7.55 per cent), Cambodia (6.9 per cent) and Malaysia (6.64 per cent).
Fitch Solutions said countries such as Thailand, Indonesia, Vietnam and the Philippines are striving to provide universal health care coverage for all their citizens, which is straining the resources and service quality in public hospitals due to the accelerated uptake.
“Governments have been slow to address the need for significant investment in public hospital infrastructure and for a greater number of healthcare professionals. For example, public hospitals are often overcrowded and plagued with shortages of doctors, medical supplies and diagnostic equipment, which affects their ability to deliver high-quality care.
“To expand health care offerings beyond the public sector, governments are providing incentives such as tax holidays, and raising the caps for foreign equity ownership to encourage private healthcare providers to fill the demand and supply gap,” it said.
The growth of the highly lucrative medical tourism business has also resulted in an increasing number of private hospitals in the Southeast Asia region seeking international certifications, such the Joint Commission International (JCI) accreditation, to expand patient capture beyond the region.
“Thailand, Malaysia and Singapore have traditionally been the major destinations for medical tourism due to government health care promotion support, availability of internationally accredited facilities and staff, and high standards of care,” Fitch Solutions said.
Key challenges in the health provider landscape include an inadequate supply of doctors and nurses, uncertainty over patients’ willingness to pay, and inability to provide cost-effective health care delivery.
“There is a shortage of doctors and nurses in the region, and local medical schools lack the capacity to meet the growing demand. Compared with the Organisation for Economic Co-operation and Development (OECD) average of over 30 doctors per 10,000 people, Southeast Asia countries have between two and 20 doctors per 10,000 people, with Indonesia being one of the big laggards in generating an adequate supply of physicians,” Fitch Solutions said.